Dow Down 54; Nasdaq Falls 24

Published 6:00 pm, Sunday, March 24, 2002

AP Business Writer

Investors awaiting more proof that earnings are improving sent stocks lower Monday and refrained from making any new commitments.

Analysts said Wall Street, still unconvinced that a solid recovery is under way, wanted to see what first-quarter reports, which begin next month, look like. Trading was mostly quiet in a trend expected to continue for the rest of the week because of the holidays. The market will be closed Friday for Good Friday, and Passover begins on Wednesday.

In late morning trading, the Dow Jones industrial average was down 53.97, or 0.5 percent, at 10,373.30.

Broader stock indicators also slipped. The Standard & Poor's 500 index lost 8.49, or 0.7 percent, at 1,140.21, and the Nasdaq composite index fell 23.79, or 1.3 percent, to 1,827.60.

"This is a waiting week. We're waiting for earnings numbers, for commentary from the company's management and guidance as to what the next quarter is going to look like," said Will Braman, chief investment officer, John Hancock Funds.

Blue chips were also mixed. Coca-Cola advanced 47 cents to $51.72, while McDonald's fell 41 cents to $27.24, continuing a loss that began Friday on an earnings warning.

After a big rally early this month, stocks have pulled back in recent sessions as investors collected their winnings and tried to figure out what is next. Stock prices have risen sharply in some sectors on expectations that a turnaround is in progress. The problem is that although economic data is strengthening, business profits have yet to indicate the same.

First-quarter earnings season, which begins in April, could give investors a better idea of how business is doing. There are concerns, however, that stock prices have risen too much and that the recovery might not be robust enough to justify the high levels. Investors are also nervous that the Federal Reserve will raise interest rates to prevent the economy from growing too quickly.

The Dow is roughly 3 percent above where it started the year, while the S&P is nearly even. The Nasdaq is down about 6 percent, but that index has struggled all year and did not benefit as much from the March rally.

Also Monday, the National Association of Realtors reported that sales of previously owned homes fell slightly in February but still were the second highest monthly level on record. The news wasn't surprising, given low interest rates and the month's warm weather.

Declining issues led advancers almost 3 to 2 on the New York Stock Exchange. Volume came to 290.67 million shares, compared with 375.12 million at the same point Friday.